Connecticut’s hospital chief executives have come out fighting against Gov. Dannel P. Malloy’s proposed budget, warning of layoffs and other dire consequences if the state’s payments and reimbursements don’t keep up with added needs.
The hospital heads, in an open letter to lawmakers, said the Malloy budget over the next two years, starting July 1, would cut hospital spending by $550 million. The letter was signed by the CEOs of 25 of Connecticut’s 30 acute care hospitals. They linked to a web site that shows the cuts each hospital would sustain.
“People who work at hospitals will lose their jobs, and so will people in the community who rely on hospitals for their incomes. Connecticut needs more jobs, not the gutting of a sector that employs more than 54,000 people and generates 110,000 jobs across the state,” the CEOs said in the letter, issued by the Connecticut Hospital Association.
Malloy’s budget, however, shows flat funding for hospitals, not a decline: $1.72 billion in the coming year and $1.77 billion in the following year, compared with $1.75 billion this year. Most of the spending is Medicaid reimbursement, and the standoff is over how much it will need to increase to keep up with what hospitals now do for patients.
The proposed plan does reflect a decline in state reimbursement for care the hospitals give, free of charge, to people who don’t have medical insurance. That’s because uncompensated care is expected to decline starting in 2014, as federal health care reforms require everyone to have coverage. The state, in fact, has already seen some savings as the state opened up Medicaid coverage to more people.
Broadly, hospital finances are a matter of hot debate, as critics — notably journalist Steven Brill, who documented what he called a skewed hospital payment system in a lengthy report in Time Magazine last month — say the institutions systematically overcharge some patients, and are profiting by gaining the upper hand in negotiations with insurers. I was on WNPR’s “Where We Live” radio show Friday morning with Brill, host John Dankosky, state health care advocate Victoria Veltri and Christopher Dadlez, CEO of Saint Francis Care in Hartford.
Dadlez defended hospitals’ financial practices, saying they are not running up excessive surpluses, and profits they do make are put back into community care. He said part of the issue is low reimbursement for Medicaid, the state and federal program for the poor, which he said would fall further under Malloy’s budget plan.
Dadlez warned of layoffs if Malloy’s cuts were to happen, in comments after the show, but he did not give estimates.